Raising Venture Capital
There are many entrepreneurs who have tasted failure one or more times while raising venture capital. It is because venture capital investing involves huge risks so the VC firms are very particular while bringing out the dollars to back a start-up. But then, there are also examples of entrepreneurs who have managed to raise venture capital at the very first attempt! So what went wrong with those who could not? There must be something that has enabled the successful entrepreneurs to convince the investors very easily.
Well, these are nothing but the most important tools that you must have in order to impress the investors. Since it is your start-up so it becomes your responsibility to reduce the amount of risk involved in venture capital investing. If you can effectively show the investors that they won’t regret investing in your start-up and can earn huge profits, they will definitely come forward.
So, here are the most important tools you need to raise venture capital successfully. Although the tools may sound like quite obvious but considering the competition level in the market, it won’t be enough to just have these tools with you. You have to show that you are the best!
Tools To Raise Venture capital
- A Unique Business Idea
you must have an idea which is not only unique but also has a huge market potential. The product or service you are planning to sell should have a genuine requirement in the market and also emerge as the best solution till now for the consumers. Remember, the venture capital investors only invest in high-potential start-ups, so make sure you don’t fail to impress them with your idea.
- A Smart and Efficient Management Team
No organization can successfully run without a great management team. Before you approach the investors, look for people who can take your business to great heights. Next to your business plan, it is your management team only that the investors would like to see before investing. A smart, hardworking, efficient and honest team is a blessing for any entrepreneur looking to raise capital.
- A Powerful Working Model
You have to create a powerful working model of your business to demonstrate to the investors. They would like to see how your business will work and how far it will be in demand in the market. You can show this with the help of a group of beta customers. These are non-paying customers who are ready to try and test your product/service provided they find it interesting enough. This is a great way to minimize the risk and help the investors gain confidence in your business.
- A Great Pitch
Your first pitch can be either constructive or destructive for you. Try with the best of your ability to make it constructive. Your first pitch should be crisp, informative and highly engaging; it need not be too long to make the investors feel sleepy. Try to create curiosity while discussing your product; let them feel that they are hearing about something that is going to create a buzz in the market (in a positive way, of course).
- Excellent Networking
Networking is very essential for entrepreneurs looking to raise capital for their start-ups, so make sure you have a strong social network. You can create accounts on various social media sites so as to get access to those people who can introduce you to your potential investors. Once again, since it is a high-risk investment, your potential investors will bother to look at you only if you are introduced to them by someone they blindly trust. So networking is a must.
With all the above tools at your hand, it won’t be difficult for you to convince a venture capital firm. However, see that you do not chase the wrong investors as it will only waste your time, energy and money. For faster access to your potential investors you can consider becoming a part of an intelligent network, such as, Merger Alpha that serves as a common platform for entrepreneurs, financial and strategic investors and advisers of the start-up ecosystem.
For more information on venture capital investing, feel free to get in touch with us at Merger Alpha http://mergeralpha.com/.